Climate Action Through Governance Chains: Investor Coalitions and the Fallacy of Scale

While large-scale collaborative initiatives have become prominent vehicles for mainstreaming climate action, many struggle to fully realise their goals. This study addresses the puzzle of why large collaborative initiatives may be unable to effectively leverage their scale to achieve their stated objectives. We deploy the analytical framework of the governance chain to better understand where, how, and why the management of paradoxical tensions causes climate governance to break down within collaborative investor-led governance. Empirically, we examine Climate Action 100+, the world’s largest climate-focused investor coalition. Drawing on semistructured interviews and document analysis, we show how defensive management approaches by asset owners and asset managers to four core tensions – goal, temporal, participation, and coopetition – constrain the coalition’s capacity to drive substantive climate action by companies further along the governance chain. We invoke the ‘fallacy of scale’ to capture how the size of private environmental governance institutions can create a false impression of their real-world influence on mainstreaming sustainability.